Quixote Sues In Sale Of Compact Disc Unit

Quixote Corp. has sued an Australian-based manufacturer for failing to pay the $26.5 million balance due in the sale of Quixote`s compact disc manufacturing subsidiary, LaserVideo Inc.

Quixote said Wednesday that Disctronics Ltd., a worldwide compact disc manufacturer, and two of its affiliates including Quatro Ltd. of Melbourne, Australia, are late in paying the balance due in the $55.5 million LaserVideo sale.

The balance was due on demand Saturday, and Quixote sued Tuesday.

Though Disctronics has said it would pay within 60 days, Quixote said it believed it was necessary to take the action when it did.

``We want to protect our shareholders` rights and feel the suit is necessary to do that,`` said Quixote spokeswoman Melissa Quinn.

In addition to payment, Quixote`s complaint seeks interest, attorney`s fees and other relief and damages related to the defendants` failure to pay on time.

Quatro is named in the suit because it owns 50.8 percent of Disctronics and is a guarantor of payment of the $26.5 million note due in the balance of the LaserVideo sale.

When Philip E. Rollhaus, Quixote`s president, announced the sale in November, he said Quixote decided to sell LaserVideo because it was being squeezed by Japanese competition in compact discs.

Quixote had spent six years developing LaserVideo in all aspects of the optical disc manufacturing business.

In the sale Quixote was to receive $29 million in cash and $26 million in convertible notes. In the transaction, Quixote was to become a major shareholder in Disctronics, giving Chicago-based Quixote the right to purchase additional stock in Disctronics under certain conditions.